Closed cities of despair or open cities

This article is contributed by
Hugh Pavletich, co-author of the Demographia housing
affordability survey, and is published on 15 October
2006

New Zealand is a tiny nation of just 4.1 million
people where 80% of our population is urbanised within a
land area of approximately 269,000km². Well less than 1.4%,
or 3766km² of our land area is urbanised, based on a
generous overall urban density estimate of 870
people/km².

This estimate should be considered
“generous” as the urban density of our mid-sized city,
Christchurch, with a population of 340,000 people & an area
of 188km², is about 1800 people/km², with the northern
cities of Wellington & Auckland having higher densities of
around 2200 people/km².

Just recently, there was detailed
research using satellite photography of the urban footprint
in the US, where it was found that only 2% of that vast
country, with nearly 300 million people, is urbanised.
Earlier estimates had been in the order of 2.6%.

It is
therefore likely that the New Zealand urban footprint may
well be as low as 0.75% of our land area.

New Zealand’s
annual population increase is slightly less than 1%, or
40,000 people/year – comprising a natural increase of
approximately 30,000 and 10,000 net immigration.

Let’s
be generous and assume that we need to accommodate a further
50,000 people on our urban peripheries each year for the
foreseeable future. How much land would be required?

Again
– let’s over-estimate and assume that we accommodate
these 50,000 people at an urban density of 1700/km², or
slightly lower than Christchurch’s current density. This
would require just 29.4km² of urban peripheral development
annually, throughout the entire country – or one hundredth
of one percent of our total land area.

We couldn’t
urbanise more than half a percent – or in total 2% of our
land area over the next 50 years – if we tried!

These
“simple facts” are ones most New Zealanders would not
have a clue about, as those with ideological & political
agendas within government, and associated with it, have been
more than happy to create the erroneous impression in New
Zealanders’ minds that we are “running out of land”.
Sadly, too many within the old media have willingly acted as
their cheerleaders.

As the co-author with Wendell Cox of
the annual Demographia housing affordability survey, our
adversaries, in being completely unable to refute its
findings, have suggested instead that the annual survey is
“simple”. They are hoping of course that others will be
persuaded that the survey is “simplistic” and better
still – written by “simpletons”!

This 2006 survey
clearly proves that to achieve affordable housing at or
below 3 times household incomes, land supply at the urban
peripheries cannot be strangled. Houston – without zoning
– proves this, as do the 23 other open-zoned urban markets
throughout middle North America. The survey also illustrates
how our urban markets within Australia & New Zealand were
affordable 20 & 30 years ago. As the co-author of the
survey, I was surprised too, that monetary policy is
impotent within an environment where urban land supply is
strangled. It is pleasing to see the Reserve Bank of New
Zealand now researching the housing sector and, as part of
this research, exploring how the “urban bubble” is
impacting on household savings, debt levels & other economic
aspects of this issue as well.

Perhaps the 2007
Demographia survey needs to be written in both English &
Greek – so the latter version better meets the needs of
those who prefer complexity & confusion!

Put rather
bluntly – the “complication & confusion” approach has
been deliberately employed & expanded as a way of
controlling people.

We are now seeing the re-emergence of
common sense, facts & disciplined thinking, as rapidly
growing numbers of soundly trained researchers globally are
focusing their attention on urban issues. Belatedly, they
are recognising that our urban areas are the engine drivers
of a modern economy. Before too long, urban planners will be
overwhelmed with factual information – and recognise that
the “complication & confusion” days are over.

The
deliberately “simple” annual Demographia survey should
be seen as just one measure. We need to see others developed
too – so more easily understood factual information is
generated, to assist the public & policymakers to refine
land use regulatory administration performance, so it better
meets people’s needs whilst protecting the
environment.

The policy focus needs to be on returning our
urban areas to affordable levels of 3 times household income
or less, on a phased basis over a reasonable time. I have
suggested local authorities be required to meet housing
affordability targets over a reasonable period of 10 years.
Put rather bluntly – we have spent 20 years creating this
mess, so it is not unreasonable to ask that we spend the
next 10 years, working together, to unwind our way out of
it.

The “regulatory culture” must change too, where
these people are trained & retrained within newly
established “land use law schools” set up between our
current schools of economics & law. The focus must be on
“rigour” & “impartiality”.

The current fall-off in
home ownership at near 1%, or 14,000 homes/year, due to the
artificial urban land scarcities, must be reversed as soon
as possible. With a housing stock of 1.4 million houses –
this suggests that each year a further 30-40,000 New
Zealanders are being denied the opportunity of home
ownership.

This is equivalent to turning the entire
population of either Manukau or Christchurch into
“renters” every 10 years!

We need to move as soon as
possible from closed cities of degradation, disruption &
despair to open cities of opportunity.

Thankfully – our
Housing Minister, Chris Carter, is providing the leadership
required and we look forward to his address at the local
government housing affordability summit, Wellington, on 30
October.

* Hugh Pavletich is managing director of
Pavletich Properties Ltd, Christchurch. He was president of
the Property Council’s South Island division from 1991-95
(when it was called Boma) and was elected a fellow of the
Urban Development Institute of Australia in 2004. During
that year he felt there was a need for an international
measure of housing affordability and teamed up with Wendell
Cox to develop the survey.

- Demographia is the website of
Wendell Cox, US campaigner for choice in urban development
and opponent of the smart growth concept. Apart from the
many articles on his website, he also runs an extensive list
of links. He also runs The Public Purpose, a transport
website.

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